1、 Market Overview
This week, the domestic melamine market first stabilized, then surged and fell back, showing an overall weak fluctuation pattern. As of October 13th, the benchmark price of urea was 1757.50 yuan/ton, a decrease of 1.26% compared to the beginning of this month (1780.00 yuan/ton).
The raw material side urea weakened synchronously. As of October 13th, the benchmark price of urea was 1757.50 yuan/ton, a decrease of 1.26% compared to the beginning of this month (1780.00 yuan/ton), indicating a loosening of cost support.
2、 Technical analysis
From the perspective of moving average system and price percentile:
1. Moving average trend: The spot price of melamine has been running above the 10 day moving average for a long time in the early part of this week. The 10 day moving average continues to be higher than the 20 day moving average, and the moving average remains positive. In the short term, it has bullish momentum, which drives the price to briefly rise; On October 11th, the price surged and peaked before quickly falling back. On October 12th, the spot price fell below the 10 day moving average and approached the 20 day moving average, indicating a short-term downward trend of the moving average and releasing a short-term adjustment signal. The 10 day moving average has turned flat, while the 20 day moving average still maintains a slow upward trend, and the support for the medium and long-term moving averages has not been completely destroyed.
2. Price range: On October 12th, the price was at a low level during the 10 day cycle, and remained in the mid to high range during the 20 day, 30 day, 60 day, and 90 day cycles; The one-year dimension is at a medium low level. This indicates a rapid short-term price pullback, but in the medium to long term, the market is still in a relatively high range, and the short-term rapid pullback belongs to the recovery of a pullback after a high-level oscillation.
3、 Fundamental Logic
supply side
Domestic melamine enterprises have maintained relatively stable production, with sufficient overall supply of goods. During the initial price stabilization phase, factory shipments were normal. However, after the price surge, downstream buyers showed insufficient willingness to take on orders, resulting in weak factory price support and a subsequent decline in prices. The downward trend in raw material urea prices has to some extent eased the cost pressure on production enterprises, but also weakened the upward support on the product cost side.
Demand side
Downstream industries such as sheet metal and impregnated paper have limited post holiday stocking efforts, with a focus on essential procurement and weak willingness to chase after high demand. After a brief surge this week, downstream wait-and-see sentiment has heated up, and there is insufficient follow-up on large transactions, making it difficult to sustain price support, which is the core reason for this round of surge and decline.
4、 Market analysis and judgment
The short-term melamine market may continue to fluctuate weakly. On the technical side, there is a warning signal that the moving average has crossed below, and there is a possibility of continued pressure in the short term; The raw material urea market is weak, and cost support is weakened. There is currently no clear expectation of a rebound in downstream demand, and high prices are suppressing terminal procurement.
If the subsequent price continues to fall below the support of the 20 day moving average, the downward pressure on the market will be further amplified; If the 20 day moving average effectively supports the bottom, the market is likely to maintain range oscillation. Follow up will focus on tracking changes in urea raw material prices, downstream sheet industry operating rates, and factory inventory changes.
